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Cyber Security Law to protect foreign business operations

The forthcoming Cyber Security Law will not affect the operations of overseas companies in China, with Chinese experts cautioning some governments and organizations against obstructing cooperation between the Chinese government and foreign companies.

China’s first Cyber Security Law, which is scheduled to take effect on June 1, states that operators of key information infrastructure should store in China important business data and personal data they collect from their operations in the country.

Although the Chinese government said the measure is not intended to unfairly target overseas companies and to “monitor, defend and handle cyber security risks and threats originating from within the country or overseas sources,” some overseas business groups have been pressuring Chinese regulators to delay the law’s implementation.

A Bloomberg report on Thursday said more than 50 trade associations and chambers of commerce signed a letter in May addressed to the government seeking a delay. They argued that the law could have an impact on cross-border trade, lock out foreign cloud operators, restrict competition and may decrease the security of products and jeopardize the privacy of Chinese citizens.

“Some overseas companies, especially multinational corporations from developed countries, have been accustomed to their privilege and special treatment in China. So when they are required to be regulated the same way as Chinese companies, they feel uncomfortable and resist,” Shen Yi, Director of the research center for the governance of global cyberspace at Fudan University, told the Global Times.

“However, many foreign firms have already saved their data in China or have been inspected by the government, and no untoward consequences have happened. We should maintain vigilance against some organizations or governments which have forced their companies to stir trouble. We will never tolerate any disruption to the practical cooperation between the Chinese government and overseas companies,” said Shen.

Growing compliance

US-based short-term rental company Airbnb immediately moved Chinese mainland-based users’ information, including guest bookings in China and Airbnb listings to local servers. The company’s spokesperson told the Global Times that “moving our data to China speeds up the localization process, which is of big help if we want to expand our business in China.”

South Korea’s leading cosmetics company AmorePacific Corp also moved its e-commerce system from its headquarters to China in May, Nandu Daily reported.

The US-China Business Council in Beijing told Bloomberg that “almost all our companies are making moves to ensure that the majority of the data they collect in China is stored on servers located within China,” adding that “it’s not just the technology companies but financial services, semiconductor manufacturers and every sector of business in China as well.”

To avoid misunderstandings, China should familiarize companies with the law. China should also strengthen its standardization process, making breakthroughs on core technologies and improving the mechanism on sharing sensitive intelligence, Shen said.

The European Union Chamber of Commerce in China said in a statement sent to the Global Times on Thursday that “the scope of ‘critical information infrastructure’ as mentioned in the Cyber Security Law remains vague, and the final version of detailed cross-border data transfer rules has yet to be released. Meanwhile, the Chamber believes that industry will strive to ensure compliance.”

German Industry and Commerce Greater China also said that they will closely monitor developments in this regard.


Please see the original article over at http://www.globaltimes.cn/content/1048747.shtml.


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